Austin – on August 1, The Trump administration will start imposing a high tariff on countries that have not yet reached commercial agreements with the United States. In response, some companies are controlling their operations by seeking to appoint their locations as an external trade areas (FTZS) to reduce the effect.
FTZ is a material area located in the United States, which is outside the American customs region. As a result, the goods that are manufactured within a location bearing the FTZ status are not subject to any tariff or customs duties until the goods actually leave the area.
“During the unfair times about the trade, which we are now, definitions cause a lot of uncertainty,” said Dave Porter, Executive Director of Economic Development of Williamson Province. “We see an increase in companies and manufacturers and we are looking for this opportunity [of] External trade area. “
One of the FTZ benefits is the inverted tariff, which allows companies to reduce or cancel the rate of fees – the percentage of imported goods that must be paid to American customs when these goods enter American trade. If the product is completed within FTZ, the company will have a 0 % fee when ready -made goods, such as phones, American trade, which leads to great cost savings.
“If you are asking 10 million dollars from the stock, and there will be a 40 % tariff – you don’t want to pay all of this in the foreground when it comes to the port, it can come directly to the foreign trade area and sit there until this product comes out,” Porter said. “You don’t have to pay it on all the products, only the piece you use now. It helps in cash flow and helps to postpone some payments on the definitions and duties.”
There are many FTZ in the United States confined to the federal government to obtain locations in the qualified region. One of them is the foreign trade area in the center of Texas, which consists of Bastrop, CaldWell, Hays, Travis, and Willamson.
Currently, in the foreign trade area in central Texas, there are five companies that have FTZ sites. These companies are Samsung, Warm Voice, HID Global, ROHR, and Flex.
Flex is an electronics manufacturing services company that makes a wide range of goods for many companies. Currently, Flex’s Austin has the setting of FTZ, and they are looking to make their ROUND Rock Rock also this FTZ set.
“Currently, they are in 55 employees, but they have plans to add 100 others over the next two years,” Porter said. “This is part of the process it is going through to make the site in Round Rock a valuable site for them.”
In the application process for the company’s website to gain FTZ’s position, Porter said that the company needs to obtain approval from the city, the boycott and the educational boycott. During the meeting of the Williamson Provincial Commissioners on Tuesday, Commissioners voted 3-1 in favor of sending a message to support the Flex to appoint the ROUND Rock Consing Facility as FTZ.
KXAN contact with Flextronics to comment and you will update this article if a response is provided.
Porter KXAN told that two other companies were also looking to obtain FTZ’s appointment in their location inside Williamson. These companies were not identified.